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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: rgammon who wrote (17162)	10/26/2001 7:22:18 PM
From: LemonHead	Read Replies (1) \| Respond to of 18928

"If you don't take profits along the way, someone else will." Andrew Vance Well I don't know if I would have, but with low cash reserves it sure is tempting. Seriously, I'm trying to limit the frequency of my sells just like I have my buys. Work in process clearly shows that "Once a Month" profits from the trends in buy or sell mode. I somehow thought that once a month trading was tied to the 1st or last of the month. Not at all!!! It is a month between transactions on what ever day they fall plus or minus. FWIW Keith

To: rgammon who wrote (17162)	10/27/2001 7:36:16 AM
From: OldAIMGuy	Read Replies (2) \| Respond to of 18928

Hi RG and Keith, RE: buying and selling frequency..... I guess I treat the Sales and Purchasing Departments differently here at V.I.E.W. I know that the Savings and Loan Department is yet another part of the total business. Since the way the business is structured, I know that Cash is a limited commodity but by AIM's selling rules I can never run out of Stocks. Thus logic says that the limited commodity should be treated differently than the unlimited one. Also, the Savings and Loan dept gets pretty noisy when their loan reserves get low. Therefore, on the Buy side, I tend to be more conservative and trade less frequently. On the Sell side, AIM creates a situation that essentially every sale will come with a profit to its purchase price. Since I'm in this business to make a profit, I don't mind doing so whenever the business profit objective is being met. Assuming a 20% total SAFE value, 5% for minimum trading, 1% for commissions and expenses, then a typical "round trip" from a buy to a sell should garner about 28% profit before taxes. If I knew that I had 1000 of one inventory item available at a specific cost, why would I turn customers away who were willing to pay me my cost plus profit on each and every piece of that inventory? If three different customers came to me during the same week and wanted to buy 100 of my inventory at a profitable price should I turn the next two away because a certain time interval hadn't passed? I can't think of any other business in which this would be done. The way AIM prices things, every time we sell some inventory, we raise the price on the remaining portion an incremental amount. This is be cause the inventory is more "scarce" and because of "demand." So, if our theoretical 1000 of inventory goes out the door at 100 units each sale, the first sale will be less profitable than the last. Some might argue that a time delay allows for a "trend" to play out and therefore make for a greater size order at a greater profit. This is true but only if the the trend does continue for the designated time. If the trend reverses, then the customer is gone, the opportunity and potential profit are postponed if not lost. I can't pay my bills with lost opportunity, just with profits. So, I take profits any time they present themselves and meet my business objectives. Because of the precious and limited nature of the Cash side of the equation, I don't follow this same thinking. It has been demonstrated that restraint in purchasing is one of the only ways to successfully make the Cash Reserve last as long as possible. Most "corrections" don't last the 19 months that we've suffered so far with this one. Many dips last only weeks, not years. That's why I have decided on a tiered approach to using the Cash Reserve. I should probably write a formal description of it and place it at the AIM Users web site for reference. Hope this helps, Tom PS: I sold some more GNSS yesterday at $48, about a week since my last sale. Both were extremely profitable sales. Both sales were from inventory purchased at $9-1/8 about a year ago (FIFO basis). Especially with a stock showing a trailing price/earnings ratio of triple digits I feel very comfortable doing this.